LUFTHANSA Considering Acquiring Air Berlin Routes And Aircraft

In news out of Germany in the last several hours, it appears that Lufthansa is a little bit more than serious about acquiring routes and aircraft from a struggling Air Berlin.

In a potential deal between unlikely bedfellows, Lufthansa is in discussions with AirBerlin’s main stake holder, Etihad, about the prospects of acquiring upwards of 40 aircraft and a majority of routes that are not operated in or out of AB’s hubs in Berlin and Duesseldorf. The acquisition would also include the crews for the aircraft.

Air Berlin currently operates 148 aircraft, so any acquisition would be a major one, since it would cut Air Berlin’s fleet by 27%. But this kind of a deal would also take the sting out of AB’s balance sheet which has hemorrhaged $1.29 BILLION in losses over the last 3 years.

The aircraft and routes would be assigned to Lufthansa’s Eurowings ‘Low Cost Carrier’ division and would immediately grow market share by eliminating the AB competition on the routes. This also plays well in Lufthansa’s plan that seeks to grow Eurowings by 25-30% in the coming year.

The one fly in the ointment will be the anti-trust fears that Germany and the EU will have. Historically, Germany and/or the EU have not looked favorably at deals that potentially reduce competition in the marketplace. But on the other hand, the real threat exists for the loss of thousands of jobs and the failure of an airline.

Not that the EU has made any good decisions lately, but here’s a chance for them to not screw something up! 😉

It would also be a welcomed jab at the ME3 who have been dumping capacity into Europe thanks to their subsidized operations, but I digress…….